manufacturing strategies for norwegian shipbuilding

Norwegian University of Science and Technology

MANUFACTURING STRATEGIES FOR NORWEGIAN SHIPBUILDING

Marco Semini, Jørund Kolsvik

IGLC workshop, 24.6.2014

Norwegian University of Science and Technology 2

OUTLINE

• Introduction: Manufacturing strategy

• Product, market, and business characteristics

• Product-process matrix

• Strategies with different CODPs (IGLO-MP)

• Degree of vertical integration (MODNET)

• Models for ship production in Norway (SUSPRO)

• Conclusions and further work


DEVELOPMENT OF MANUFACTURING STRATEGY

(Based on Hill 2000 and the Platts-Gregory procedure 1990)

Product/market

Performance objectives

Cost

Quality

Lead time

Delivery precision

Flexibility

Decision areas

Vertical integration

Organizational structure and control

Facilities, resources and capacities

Process technology

Sourcing and distribution

Production planning and control

Human resources and capabilities

Com-

plementors

Suppliers

Competitors

Customers

National and

international

industry rules and

regulations

National work

system and culture

Economic and

socio-demographic

environment

Technology and

innovation


PRODUCT/MARKET CHARACTERISTICS

Shipbuilding in general• Large, heavy, expensive

products with a long life• Large product variety

(customization), relatively low volumes

• Uncertain, fluctuating demand with frequent changes

• Many components and complex bills-of-material

• Increasing environmental and life-cycle requirements

Norwegian shipbuilding• At an international level

primarily competitive in the offshore sector

• Equipment/technology-intensive (rather than steel or accommodation)

• Deep product structure

• High level of customization, innovation, and specialization

• High level of change orders


NORWEGIAN BUSINESS ENVIRONMENT

• Vital tradition for innovating and manufacturing customized, technologically advanced products

• Highly educated and skilled work force

• Flat, flexible, and informal organizational structure

• High level of worker autonomy

• Dedicated and experiencedseamanship

• High-cost country• Main market moving

away from Europe• Increasing global

competition• Lack of resources


PRODUCT-PROCESS MATRIX

(Hayes and Wheelwright 1979)


PROJECT-BASED MANUFACTURING

General

• Integrated

design/engineering,

procurement, construction

• High-variety, low volume

production

• Long lead times

• Requirements to flexibility

and responsiveness

• Variety of processes types

Shipbuilding-specific

• Highly technical and complicated

• Many skilled trades and contractors working under the control of a primary contractor.

• International

• Many yards competing for a fairly limited amount of work


CUSTOMER ORDER DECOUPLING POINT

Adapted from Olhager (2003)


CUSTOMER ORDER DECOUPLING POINT

Project

Continuous

Mass

Batch

Jobbing

Volume

Variety

Low

High

High

Low

MTO

ATO

MTS

ETO

Based on Hayes & Wheelwright(1984), and Olhager & Wikner (2000)


CODP IN SHIPBUILDING

(Semini et al., 2014)


CODP IN SHIPBUILDING

Customized design

MilestonesContract

signingStart of

production

Production & Assembly

Commis-

sioning

After-Sale

Period

DeliveryLaunching

and start

of on-

board

activities

CODP

Market research &

concept design

Basic &

functional

design

Engineering

Supply chain development

& procurement

Contract

design

Planning & coordination

Standardized design



LINKING STRATEGIES TO PRODUCT/MARKET

Product/market attributes Customized design strategy Standardized design

strategyCost/Price Higher The more ships produced, the

lower the unit cost and price

Lead time Longer Shorter (if production can start

quickly)

Delivery precision More difficult to achieve Easier to achieve

Level of customization Higher Lower

Variety Higher Lower

Modularity and standardization Desirable, but difficult to achieve A must

Accommodation of change

orders

Part of the value offered to the

customer

Must be kept low

Number of components Very high High

Minimum volume requirements One or two Typically three or more

Order qualifiers Quality, lead time, on-time

delivery, price

Quality, lead time, on-time

delivery

Order winners Flexibility and customization,

product design/features

Price, product design/features



DEGREE OF VERTICAL INTEGRATION (MODNET)

(Mudambi, 2008)


DEGREE OF VERTICAL INTEGRATION (MODNET)

Project management

The completeshipyard

Degree of vertical integration

Today's Norwegian yards

HighLow

Type Project managementorganization

Today's Norwegian yard The complete shipyard

In-house activities

Design, project management, logistics

Design, outfitting, project management

Design, hull production, outfitting, project management

Comp. advantage

Systems integration; coordination of internal and external processes

Systems integration; coordination of internal and external processes

Process knowledge; integration of internal processes

Purchasing Yard capacity and building expertise

Hull, modules, systems, components

Materials and simple systems

Based on Longva et al. (2007) and Hicks (2000)


SHIP PRODUCTION AND ASSEMBLY

• In literature, the term manufacturing strategy usually refers to physical production and assembly

• Description of how the company currently carries out its ship production activities.– Important input for design process

• The build strategy is the application of a manufacturing strategy to a particular contract (Bruce & Garrard, 1999)– Build strategy elements: What, how, when, where and with what

resources?


SHIPBUILDING – HISTORICAL OVERVIEW

• «Piece by piece from the ground up»

• Riveting for joining steelplates and parts

• Work concentrated around shipway and outfit pier

WWII 1960 1970

(Storch et al., 1995)


• Adaption of prefabrication of weldments awayfrom shipsways

• Development of high-technology steel cutting and welding

• Work stations defined and Group Technology applied

• The shipways became assembly areas, rather thanfabrication areas

• Layout change, from job-shop to flow based

• Specialization of facilities, tools, worker skills

1960WWII 1970


(Storch et al., 1995)


WWII 19601970


• Larger & more specialized ship types

• Modifying exisiting yards

• Series production & flow line techniques

• High technology introduced in steel fabrication and transport & lifting

• Further advances in modular construction

• Pre-outfitting introduced(Storch et al., 1995)


19701960WWII

• Collapsing demand, bankrupting shipyards heavily invested in mechanization and large-scale production

• Shipyards with earlier focus on management prevail enter the success of LEAN Production



Basic goal: cost reduction via elimiation of unnecessary operations, waiting time, and inventories

19701960WWII

LEAN SHIPBUILDING

(Liker & Lamb, 2000)


19701960WWII1. Identify

value

2. Map thevalue

stream

3. Createflow

4. Establish

pull

5. Seekperfection

LEAN SHIPBUILDING



1965-1995: Japanese shipbuilders improved theirproductivity by 150%.How?• Perfecting structural block construction

approach• Developing advanced and zone outfitting• Applying lean principles

• Others are following

19701960WWII

LEAN SHIPBUILDING



SUMMARY OF SOME MODERN SHIP PRODUCTION AND ASSEMBLY METHODS

Group technology Exploit the similarities of intermediate products to gain production economies of scale for non-standard products

Standardization Standardized materials, components and modules give economies of scale and increased efficiency, reduced variability and easier planning

Modular construction Based on modular design, allows effective production of complete modules by smaller, more competitive businesses.

Zone construction When the blocks are assembled, use zones as a reference for materials and part lists, drawings, plans, schedules , follow up, and documentation.

Structural prefabrication, block construction

Producing parts of the steel structure outside the berth/dock. Units, 2D blocks, 3D blocks, grand/mega/ring blocks. Blocks of increasing size. Parallel construction of blocks.

Pre-outfitting (pre-erection outfitting, early outfitting, pre-erection system installation)

Installation of ship system components prior to final assembly of the primary structure. On-unit and on-block outfitting.


PRE-OUTFITTING

Advantages• Improved work access and working positions• Shorter distances for workers, materials, and

equipment• Reduced HSE risk• Reduced need for installation, use, and

removal of temporary product support services

• Work in controlled environment, with possibility for roof and other infrastructure

• Faster, less expensive, better quality control• Automation (cost savings and HSE

improvements (exposure to chemicals etc.))• Less sequence dependency among jobs• No need for damages on complete work• Increased opportunity for parallel work

Drawbacks• Increased inventory carrying

cost (Cost of capital, risk of damage, etc.)

• Potential obstacles for later access

• Sections/blocks heavier

• Reduced opportunity for concurrent engineering

(Based on Hagen, 2014)


Pre

fabrica

tion

(su

pp

ort

s,

mo

du

les,

pip

es)

Pre

-outf

ittin

g

Bla

sting &

pain

tin

g/c

oatin

g

Tra

nsp

ort

& h

and

ling

(sup

po

rts a

ll pro

cesse

s)

Dim

ensio

na

l con

tro

l &

insp

ection

(su

ppo

rts a

ll pro

ce

sse

s)

Raw material reception &

preparation

Marking, cutting & conditioning

of steel plates & profiles

Fabrication of 2D

blocks

Fabrication of 3D

blocks

Assembly of grand

blocks / pre-erection

Erection & outfitting

Launching

Finishing & outfitting

Commissioning &

trials

Delivery

MODERN SHIPBUILDING – PROCESS OVERVIEW

(Andritsos & Perez-Prat, 2000)


Marking, cutting & conditioning of steel plates and profiles• Marking

– Powder marking, Inkjet marking, Plasma arc marking, Laser marking

• Cutting

– Shears, Roller shears, water jet cutting, Thermal cutting(Oxy-Fuel cutting, Plasma-cutting. Laser cutting)




Fabrication of 2D blocks• Typical equipment

– Roller bed, Clamping, Butt-welding gantry, Panel

turning/turnover arrangement, Stiffener pallet, Mobile Grinding,

Mobile stiffener gantry, Fillet-welding gantry, Mobile web gantry,

Web welding gantry, Lift-off transportation station

• Types of panel lines

– Mini panel line, Normal flat panel line, Double bottom line,

Curved panel line, Girder building line




Fabrication of 3D blocks• Assembly of flat panels, 2D sub-blocks and curved blocks

• Build strategy designed so as to make the welding in best

possible position, but also maintian possibilities of efficient

block outfitting

• Steel and outfitting work are parallel acitivites in in the

assembly

• When properly planned, a major part of the outfitting can be

performed in the workshop




Erection & Outfitting• Blocks are joined together in the dock and seated on the

dock. They are arranged according to hull form or docking

plan and then welded.

• Welding is by far the most important technology applied:– The weight of the metal deposited by welding in a ship can easily be as much

as 3 to 4% ot the total steel weight, and the cost of the welding consumable

per kg deposited can be more than 10 times the cost of the same weight in

steel

• Erection of prefabriacations(supports, modules,pipes)




Conclusions and further work

• We have presented different strategies for shipbuilding and linked them to product/market characteristics

• We are currently defining three models for Norwegian shipbuilding based on different degrees of domestic hull production.

• The overall purpose is to develop knowledge and theory about shipbuilding of relevance for Norway and other high-cost countries

• Further work (in SUSPRO):


REFERENCES

Andritsos, F., & Perez-Prat, J. (2000). State-of-the-Art report on: The Automation and Integration of Production Processes in Shipbuilding.

EURPOEAN COMMISSION JOINT RESEARCH CENTRE. INSTITUE FOR SYSTEMS, INFORMATICS & SAFETY

Bruce, G. J., & Garrard, I. (1999). THE BUSINESS OF SHIPBUILDING. London: LLP Reference Publishing.

Hagen, A. (2014). TMR4125, Shipbuilding lecture notes. Institutt for marin teknikk, NTNU. Trondheim.

Hayes, R. H., & Wheelwright, S. C. (1984). Restoring our competitive edge. New York, John Wiley & Sons.

Hayes, S.C. & Wheelwright, R. H. (1979). Link manufacturing process and product life cycles. Harvard business review, 57 (1), 133-265.

Hicks, C., McGovern, T., and Earl, C. F. (2001) "A typology of UK engineer-to-order companies." International Journal of Logistics 4(1). 43-

56.

Hill, T. (2000). Manufacturing strategy: text and cases, Basingstoke, Palgrave.

Liker, J. K. & Lamb, T. (2000). Lean Manufacturing Principles Guide, Version 0.5. A Guide to Lean Shipbuilding. National Steel & Shipbuilding

Co.

Longva, T., Horgen, R., & Brett, P. O. (2007). DP - Konkurransekraftutvikling, verdiskapning og usikkerhet ved samvirkende

forretningskonsepter i norskkontrollert skipsbygging. DNV Research & Innovation.

Mudambi, R. (2008). Location, control and innovation in knowledge-intensive industries. Journal of Economic Geography, 8(5), pp. 699-

725.


REFERENCES

Olhager, J. (2003) "Strategic positioning of the order penetration point." International Journal of Production Economics. 85(3). pp. 319-329.

Olhager, J. & Wikner, J. (2000) "Production planning and control tools." Production Planning & Control. 11(3) pp. 210-222.

Platts, K. W., & Gregory, M.J. (1990) "Manufacturing audit in the process of strategy formulation." International Journal of Operations &

Production Management 10(9) pp. 5-26.

Semini, M. et al. (2014) "Strategies for customized shipbuilding with different customer order decoupling points." Proceedings of the

Institution of Mechanical Engineers, Part M: Journal of Engineering for the Maritime Environment (2014). DOI: 1475090213493770.

Spicknall, M. H. (2003). The Shipbuilding Process. Society of Naval Architects and Marine Engineers

Storch, R. L., Hammon, C. P., Bunch, H. M., & Moore, R. C. (1995). SHIP PRODUCTION SECOND EDITION. CENTRVILLE, MARYLAND: CORNELL

MARITIME PRESS PRESS

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